Macy's By Mail Debuts Catalog

NEW YORK--Marking its parent company's first foray into cataloging, Macy's By Mail Inc. unveiled a 120-page book at a press conference here last week that features the well-known star logo prominently on its cover with the headline "The New Shining Star."

Macy's By Mail executives said the company dropped 2 million catalogs in the first installment of a plan that calls for 10 million books to reach one out of 10 U.S. households by year's end.

Catalog consultant Maxwell Sroge, president of Maxwell Sroge Co., Evanston, IL, estimated that Macy's could reasonably see sales of $2.50 per catalog, or $25 million by 1999.

"If they go into 1999 mailing 20, 30 or 40 million catalogs, then they start to get up there with the big boys," said Sroge, adding that it's highly unusual for Macy's to release any numbers. "If I were running Macy's By Mail, nobody would know anything until they saw my first catalog."

The names for Macy's By Mail's first drop were a combination of known catalog shoppers and noncatalog shoppers from Macy's parent company Federated Department Stores' database of 58 million credit-card account holders in 30 million households. Besides Macy's, Cincinnati-based Federated stores include Lazarus, The Bon Marché, Bloomingdale's, Burdines, Stern's, Rich's and Goldsmith's.

To whittle the initial prospecting list down to 2 million, Macy's By Mail enhanced Federated's database with information from cooperative database companies Abacus and Z-24 and culled "good to better" product buyers using a combination of unspecified criteria, including how much and how often they buy from Federated department stores and how far they live from the nearest Macy's.

"We're probably the only mail-order company who can launch a catalog without relying on outside lists," said Gary Ostrager, vice president of direct marketing of Brooklyn-based Macy's By Mail. "We don't know who is going to respond, but we believe we'll find out quickly."

"My experience has been that demographics don't dictate response," he said. "Lifestyles and psychographics are stronger drivers."

Macy's By Mail included an undisclosed small percentage of rented names in last week's drop to help benchmark the performance of Federated's house file. Ronald Ramseyer, president and CEO of Macy's By Mail, said the rented names were "primarily from the 14 [Midwestern] states where Federated is not."

Ramseyer said Macy's By Mail soon will expand its book to 200 pages and within five years plans to be doing $250 million in sales per year. "That's the minimum of where we should be," he said.

Company plans call for a combination of three catalog types: a main book to be mailed one to three times a month, end-of-season sale books and specialty catalogs like men's big-and-tall books and holiday-cooking catalogs. Its first holiday catalog is slated to drop in October.

The first catalog includes a 50-50 mix of "status brands" like Tommy Hilfiger, Liz Claiborne and Polo and private labels like Charter Club and INC.

Sroge said he is surprised Macy's main book features such a broad offering in an era of specialization: "Lands End, Lillian Vernon and L.L. Bean have all gone from single catalogs to multiple specialty catalogs."

As for future product offerings, "expansion of the business will be customer driven," said Stacy Goldberg, vice president and divisional merchandise manager, women's apparel and accessories. "We're not going to guess. We're going to let them tell us where to go."

The initial 120-page book features 113 pages of product and seven pages of nonselling space. Besides the standard opening customer service spread, the catalog features editorial spreads on pages 12 and 13 and pages 110 and 111. One pitches the benefits of wool, the other is dedicated to the launch of Tommy Hilfiger's new home collection this fall.

Fulfillment for Macy's By Mail will be handled by the same house in Cheshire, CT, that handles Bloomingdale's By Mail. Company executives said Macy's By Mail's goal is to pick, pack and ship within 24 hours and deliver within three to five days. Customer returns will be accepted by mail and at Macy's store locations.

To gauge customer reaction, Macy's By Mail is inserting survey cards in catalogs and in orders. It plans to track the retail and catalog buying behavior of customers who receive the catalog against those who don't. Executives wouldn't disclose what the average order size is from Macy's retail shoppers.

Executives said the company doesn't plan to advertise the catalog using outside sources like print advertising, but will test internal advertising like billing statement inserts.

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